ripe for takeover - 4m ounces of gold, page-35

Hi RP
Here is an interesting article we all need to know about.
Cheers



From: Wealth Daily
Date sent 09/07/2010 09:09:27 am
Subject: The Chinese kill for this stuff. Literally.


Wealth Daily (images are being blocked)
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Tuesday, September 7th, 2010

Dear Wealth Daily Reader,

This material isn't radioactive, isn't a narcotic, and cannot be used to make a weapon.

And yet, unauthorized possession of it is one of the 68 crimes currently listed in the Chinese criminal justice codes as punishable by death.

The reason?

It's the one asset that the cash-rich Chinese economy doesn't have nearly enough of...

... The one asset they desperately need to stay in business.

Right now, the world's fastest growing economy is preparing to start one of history's biggest bull markets...

As it spends over $2 trillion to end the shortage of this crucial material.

To learn about the company that stands to gain as much as 10,800% on this massive wave of demand...

Read on.

Good Investing,

Brian Hicks

Brian Hicks
Publisher, Wealth Daily


Chinas Blood Metal

The Chinese government was so scared of this commodity...

That unauthorized ownership and trading of it carried the death penalty.

But after decades of strict control, it's become the one major asset they desperately lack...

Today, $2.13 trillion in cold, hard cash is about to even the playing field.



Dear Reader,

It's an asset that the Chinese Communist Party deemed so dangerous... so potentially disruptive to their control of the country...

That to this day, its unauthorized ownership is still listed under Article 212 of Chinese criminal procedure protocol as punishable by death.

For decades, banks were forbidden to buy it, and the closest any regular citizen could get to it without risking his or her life was measured by the thickness of a museum case's Plexiglas panel.

And it all made perfect sense.

You see, long before China became an economic superpower, the Communist Party understood the power of this material...

They knew that having a monopoly on this essential resource would ensure their iron grip on the economic future of the nation.

And they did all so they could too keep Chinese gold under exclusive Party control.

But as their nation's economy mushroomed 800% in the last 10 years...

Trillions of dollars flowed into the hands of Chinese businesses and individuals.

And this flow of cash only continues to accelerate every day.

At this very moment, China is on pace to overtake the EU as the world's second biggest economy in little as the next 24 months.

However, there is one problem...

The Chinese economy expanded quickly — maybe too quickly for its own good.

Unable to keep up with the massive influxes of cash because of strict government control, national holdings of this extremely finite material fell behind...

And today, they are sorely lagging behind the European and American economies.

In order for China's ownership of this rare asset to rival that of the world's great Western economic powers, the Middle Kingdom would have to multiply its share by a staggering 3000%.

It's the one resource that has the power to strengthen economies, give power to reserve currencies, and stabilize political regimes...

All things that the Chinese Communist Party must do to stay in power.

So the Party did the only thing they could...

They loosened their grip.

952_quote2

With their recent historic deregulation of the purchase of this investment, Chinese authorities are finally allowing the country's banks and civilians to buy and sell as much as they can get their hands on.

It's a simple strategy to get this asset circulating within their borders and through their network of government-run banks.

And with over $2 trillion earmarked to boost their overall national holdings...

We may be on the edge of the biggest commodities rush in modern history.

In the next few minutes, you'll understand exactly what this asset is — and why right now may be the best time ever to own it.

I'll also show you a way to buy this investment for over 95% off its current market price, before the Chinese start gobbling up every loose gram they can get their hands on...

But before I do that, I want to show you why — regardless of what the pundits tell you see on TV — right now may be most exciting investment period of your lifetime.

You'll never profit like this again — EVER

And here's why:

Europe, North America, Asia...

All of the world's leading economic regions are reeling from a recession that will not end.

It's a situation that's even got China — the world's fastest-growing, most liquid economy — frightened.

You see, although the Chinese industrial machine has flooded the country with plenty of cash...

The Chinese still lack the one commodity that, throughout history, has been guaranteed to freely store, transfer, and multiply wealth...

They lack the single asset that governments have depended on for centuries to ride out recessions and cushion the effects of years of inflation on reserve currencies...

The Chinese lack gold.

Just look at this table to see what I mean:

world_goldimg2

Compared to the established Asian, European, and North American economies, China and India sorely lack in the one area that may be most important to them in the coming years.

Looking closely at the foreign reserves of India and China, it's clear they would have to multiply their gold holdings by a factor of 9 and 45 respectively, just to catch up to the United States.

And as you read this, that's exactly what they're doing.

India and China are working overtime to even out the gap separating them from the world's old-guard economic leaders.

952_quote3

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And it's not just giant government-operated financial institutions that have flooded into this newly opened market...

The biggest single segment of buyers may prove to come from the emerging pool of China's and India's private investors.

You see, Chinese and Indian families save between 30% and 40% of their annual earnings (on average).

That's up to eight times the rate at which their American counterparts save.

And yet — up until now — the Chinese and Indian domestic gold markets still lagged behind the United States and Europe by a factor of five.

gold_chart1c

But just like their respective banking institutions, these individual investors are rapidly closing the "gold gap."

Since last year, domestic demand for net gold investments in China has increased by121%.

952_chinachart

According to UBS, the world's second largest manager of private wealth assets:

"The international gold market is now paying a lot more attention to China's gold demand, not just from an official reserve asset perspective, but also private demand. Behind India, China is the second-largest physical consumer. Therefore any step to integrate, liberalize, and expand this market should, in time, foster a rising appetite for gold."

In India, however, the news may be even more favorable...

Net Indian gold investment volume skyrocketed by 264% in 2010.

And there are other major trends on the rise in the world's second most populous country:

1. In value terms, Indian gold investments accounted for over $3 billion — an increase of 300% over last year.
2. Overall, total Indian gold demand in terms of tonnage nearly doubled, increasing 94% to 365 tonnes.
3. Worth over $13 billion, the value of India's gold demand increased 122% during 1H 2010.
4. The eight gold ETFs that trade on the Bombay Stock Exchange have nearly doubled their bullion holdings in the past year, to 11 tonnes.
5. Indian gold demand in the second half of 2010 is likely to rise at least 25%.

All this activity from two of the world's fastest growing economies has contributed to recent rises in gold prices.

The real explosion in gold value, however, is yet to come... And mostly likely, it'll be of a magnitude never seen before.

quote_5

Today, the most conservative estimates have gold doubling — even tripling — in the next two years.

Some, however, are predicting even more dramatic growth, as new markets push demand higher and higher.

For example, if China's domestic gold consumption were to match U.S. levels, the world would have to produce an extra 12.4 million ounces of gold.

That's more than China itself — the world's single biggest producer — turns out in a year.

And considering that world gold production has dropped 8 out of the past 10 years, producing an extra 12 million ounces of gold per year to meet the demand will prove difficult, if not impossible.

Such a milestone would push prices higher than ever.

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So, no matter who you listen to...

The conclusion is almost always the same:

It's highly unlikely that you'll be looking at a bull market like this one ever again in your lifetime.

It really will be one for the books.

"Gold hit a new record high today following comments by Yin Zhongqing, vice chairman of the finance committee of the National People's Congress, that China should increase its holdings of precious metals and oil as it invests its foreign reserves... Even though China has leaped ahead of Switzerland in terms of tonnage holdings (1,054 tonnes), gold accounts for 1.6 percent of the reserves held by the People's Bank of China. That compares with a share of 72.8% for the U.S. (which holds 8,133 tonnes), 68.1% for Germany, and roughly 66% for both France and Italy." — FX Street

Now, I know what you're thinking...

With trillions of dollars already made available by China and India to close the gold gap with Japan, Europe, and the United States...

You might be tempted to get on the bandwagon and pick some up for yourself.

But don't go running off to your local gold or coin dealer or jeweler just yet.

There's something you should know first.

You see, there's another method of investing in gold. It's a method used mostly by professional investors, financial institutions, and billionaire tycoons.

And it does something that almost no stock, bond, or certificate can do...

You see, this strategy doesn't just track the price of gold dollar for dollar, cent for cent. This strategy will actually multiply gold's earning potential.

It's not hard to do...

Actually, you can buy this investment just like any other security you buy using your online brokerage account.

But used correctly, this investment can return 18x the profits of gold.

So if gold rises by a miniscule 6%...

The value o f your investment more than doubles!

Let me explain exactly how it works...

Ground Floor Investing: Gold
Early Investors Turn Every $9k into $40,000 per Quarter

Since 2008, gold's price has gone from $1000/ounce to about $1250 an ounce...

That's an increase of 25%.

Compared with the DOW — which has lost 12% in that same timeframe — that's not bad.

In fact it illustrates perfectly what I said about gold holding its value when other investments do not.

But look at this...

Here is a list of 10 well-performing gold stocks from within that same time span:

* Animas resources - up 410% in 10 months
* Romios Gold - up 610% in 5 months
* AUEX Ventures - up 295% in 5 months
* Terraco Gold - up 333% in 3.5 months
* Miranda Gold - up 221% in 2 months
* Midway Gold - up 461% in 4 months
* Paramount gold - up 583% in 7 months
* Starcore International Ventures - up 366% in 2 months
* Evolving Gold Corp - up 410% in 1 month
* Southern Arc Minerals - up 770 in 3 weeks

On average, that's a gain of 446%...

Which means that mining exploration has outpaced gold's progress by a factor of 18!